Medicare Basics

Medicare 101: Your Guide to Understanding Medicare

Medicare is the federal health insurance program for people age 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease¹ (permanent kidney failure requiring dialysis² or a transplant).³ It's a complex system, so here's a breakdown of the basics:

Eligibility:

Generally, you are eligible for Medicare if you are a U.S. citizen or have been a legal resident for at least 5 years and meet one of the following criteria:

• Age 65 or older: You or your spouse has worked for at least 10 years (40 quarters) in Medicare-covered employment.⁴ If you haven't worked enough, you may still be eligible by paying a monthly premium.⁵
• Under 65 with a disability: You have received Social Security disability benefits for 24 months or have End-Stage Renal Disease or Amyotrophic Lateral Sclerosis⁶ (ALS).⁷

The Four Parts of Medicare:

Medicare has four main parts, each covering different types of healthcare services:⁸

• Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.⁹ Most people don't pay a monthly premium for Part A¹⁰ if they or their spouse have worked and paid Medicare taxes for the required time.¹¹ However, there are deductibles and coinsurance costs associated with Part A services.¹² In 2025, the deductible for each benefit period is $1,676.¹³
• Part B (Medical Insurance): Covers certain doctors' services, outpatient care, medical supplies, and preventive services.¹⁴ Most people pay a monthly¹⁵ premium for Part B.¹⁶ In 2025, the standard monthly premium is $185.00, but it can be higher depending on your income.¹⁷ There is also an annual deductible ($257 in 2025) and typically a 20% coinsurance for most Part B services after you meet the deductible.¹⁸
• Part C (Medicare Advantage): These are plans offered by private companies approved by Medicare.¹⁹ They bundle Part A and Part B coverage and often include extra benefits like vision, dental, and hearing care, as well as prescription drug coverage (Part D).²⁰ Costs vary depending on the plan. You must have Part A and Part B to enroll in a Medicare Advantage plan.²¹
• Part D (Prescription Drug Coverage): Helps cover the cost of prescription drugs.²² These plans are offered by private insurance companies that have contracted with Medicare.²³ Enrollment in Part D is voluntary and has a separate monthly premium, which varies by plan.²⁴ You may also have a deductible, copayments, or coinsurance costs.²⁵ Extra help is available for people with limited income and resources to assist with Part D costs.²⁶

Key Things to Know:

• Original Medicare (Parts A & B): This is the traditional fee-for-service program managed directly by the federal government.²⁷ You can go to any doctor or hospital that accepts Medicare.
• Medicare Advantage (Part C): These plans have their own rules and networks of doctors and hospitals.²⁸ Costs and coverage can vary significantly.
• Medigap (Medicare Supplement Insurance): These are private insurance plans that help pay some of the out-of-pocket costs (like deductibles and coinsurance) of Original Medicare.²⁹ You cannot have both a Medigap policy and a Medicare Advantage plan.³⁰
• Enrollment Periods: There are specific times when you can enroll in Medicare.³¹ The Initial Enrollment Period (IEP) is a 7-month window surrounding your 65th birthday. There are also General Enrollment Periods (GEP) and Special Enrollment Periods (SEP) for certain situations.³² Failing to enroll when first eligible can result in late enrollment penalties.³³
• Costs: Medicare costs can include monthly premiums, annual deductibles, copayments (a fixed amount you pay for a covered service), and coinsurance (a percentage of the cost you pay for a covered service).³⁴ Your out-of-pocket costs will depend on the parts of Medicare you have and the services you use.
• Extra Help: If you have limited income and resources, you may qualify for the Extra Help program to assist with Medicare prescription drug costs.³⁵ You may also qualify for Medicare Savings Programs to help with other Medicare costs.³⁶

Making Your Medicare Choices:

Choosing the right Medicare coverage depends on your individual healthcare needs, financial situation, and preferences. Consider the following:

• Do you prefer the flexibility of Original Medicare or the bundled services of a Medicare Advantage plan?
• Do you need prescription drug coverage (Part D)?
• Can you afford potential out-of-pocket costs with Original Medicare, or would a Medigap policy or a Medicare Advantage plan with cost-sharing limits be a better fit?
• Do you have specific healthcare needs that might be better addressed by a particular Medicare Advantage plan (e.g., vision, dental, hearing)?

Where to Get More Information:

• Medicare.gov: The official website of Medicare is a comprehensive resource for all things Medicare.³⁷
• Social Security Administration (SSA): You can apply for Medicare and get information about eligibility through the SSA website or by calling them.³⁸
• 1-800-MEDICARE (1-800-633-4227): You can call this number for general Medicare information and assistance.
• State Health Insurance Assistance Programs (SHIPs): These programs offer free, unbiased counseling to help you understand your Medicare options.³⁹

Understanding Medicare is crucial for making informed decisions about your healthcare. Take the time to learn about your options and choose the coverage that best meets your needs.